How to Manage Risks When Working with Contractors?

Comprehensive Approach to Contractor Risk Management

Managing contractor safety is one of the most difficult tasks for large industrial enterprises. Often, companies focus on isolated tools, missing the big picture. In his presentation, Georgy Adzhienko, Head of the Contractor Relations Department at NLMK Group, breaks down a step-by-step algorithm for building a comprehensive risk management system when working with contractors, which helped reduce the LTIFR by more than 50% over three years.

Step 1: Defining the Perimeter and Studying the Problems

The first and most important stage is understanding the scale of the task. The speaker emphasizes that it is impossible to manage what is not measured. Using NLMK as an example, this involves about 15,000 workers from more than 1,000 companies distributed across construction, repairs, and logistics. Understanding the perimeter allows moving on to the analysis of real problems. The analysis showed that the main risks lie not in large companies with established management systems, but in small contractors (less than 100 people) working in workshops without proper control. The main causes of incidents are a low level of competence, lack of control, and poor quality of documentation (Work Execution Plans, Risk Assessments, Technological Maps).

Step 2: Aligning Goals and Allocating Resources

Any safety initiatives are doomed to fail without management support and resource allocation. The speaker shows, using his company as an example, how global goals (0.5 LTIFR, zero fatalities) are decomposed into specific plans for each area. A key success factor is assigning responsibility to non-production personnel (for example, the Vice President for Investments) and allocating a targeted budget for supervising, training, and additional headcount.

Step 3: Developing Tools and Focusing on Priorities

The presentation details the approach to developing tools using the example of a comprehensive program for organizing work at height. The program includes end-to-end requirements: from induction training and testing to knowledge verification at a training ground and standardization of scaffolding and anchor lines. It is important not just to create a methodology, but to pilot test it before large-scale implementation. Given limited resources, the company uses project risk level assessment, directing maximum efforts (supervising, control) to high-risk projects.

Step 4: Communications and Quality Control

The system will not work without established communications. This includes kick-off meetings before work begins, regular forums on top risks, and an open exchange of practices with contractors. The final stage of the algorithm is quality control of the system itself through line walkdowns, performance monitoring, and targeted audits of specific standard execution (for example, scaffolding installation).

Incoming Control and Working with Subcontractors

The speaker pays special attention to incoming control. Despite having certificates, the company conducts its own knowledge testing before issuing a pass. The complex problem of subcontractor control is also discussed: limiting subcontracting levels and auditing general contractors on how they exercise operational control over their subcontractors.

What you will learn from this webinar:

• How to correctly define the perimeter of work with contractors and identify real sources of risks?
• How to engage top management and justify the allocation of resources for contractor safety?
• How to build an end-to-end control system for high-hazard work (using work at height as an example)?
• How to organize effective incoming knowledge control for contractor employees?
• How to manage risks in multi-level subcontracting chains?